MODELLING AND FORECASTING INFLATION RATES IN GHANA: AN APPLICATION OF SARIMA MODELS

Ghana faces a macroeconomic problem of inflation for a long period of time. The problem in somehow slows the economic growth in this country. As we all know, inflation is one of the major economic challenges facing most countries in the world especially those in African including Ghana. Therefore, forecasting inflation rates in Ghana becomes very important for its government to design economic strategies or effective monetary policies to combat any unexpected high inflation in this country. This paper studies seasonal autoregressive integrated moving average model to forecast inflation rates in Ghana. Using monthly inflation data from July 1991 to December 2009, we find that ARIMA (1,1,1)(0,0,1)12 can represent the data behavior of inflation rate in Ghana well. Based on the selected model, we forecast seven (7) months inflation rates of Ghana outside the sample period (i.e. from January 2010 to July 2010). The observed inflation rate from January to April which was published by Ghana Statistical Service Department fall within the 95% confidence interval obtained from the designed model. The forecasted results show a decreasing pattern and a turning point of Ghana inflation in the month of July.

Are central bank independence reforms necessary for achieving low and stable inflation?

Using data on the occurence of central bank independence (CBI) reforms in 131 countries during 1980-2005, we test whether they were important in reducing inflation and maintaining price stability. CBI reforms are found to have reduced inflation on average 3.31% when countries with historically high inflation rates are included. But countries with lower inflation have reduced it without institutional reforms granting central banks more independence, undermining the theoretical time-inconsistency case for CBI. There is furthermore no evidence that CBI reforms have helped reduce inflation variability.

Effects of central bank independence reforms on inflation in different parts of the world

The purpose of this study is to analyze the effect of CBI-reforms on inflation in different parts of the world from a theoretical and empirical perspective. Compared to previous studies, this study focuses on whether CBI-reforms have different effects on reducing inflation in different parts of the world. The study is based on a 132 country data-set from 1980 to 2005 compiled by Daunfeldt et al. (2008). The result indicates that the reduction in inflation due to the CBI-reforms varies between 2.2 and 12.32 percentage points in Asia, Europe, South America and Oceania, supporting the claim that implementing CBI-reforms can be successful in reducing inflation in most of the parts of the world.

Likelihood estimate of treatment effects under selection bias

We consider methods for estimating causal effects of treatment in the situation where the individuals in the treatment and the control group are self selected, i.e., the selection mechanism is not randomized. In this case, simple comparison of treated and control outcomes will not generally yield valid estimates of casual effects. The propensity score method is frequently used for the evaluation of treatment effect. However, this method is based onsome strong assumptions, which are not directly testable. In this paper, we present an alternative modeling approachto draw causal inference by using share random-effect model and the computational algorithm to draw likelihood based inference with such a model. With small numerical studies and a real data analysis, we show that our approach gives not only more efficient estimates but it is also less sensitive to model misspecifications, which we consider, than the existing methods.

Efeitos da variação da carga por eixo, pressão de inflação e tipo de pneu na resposta elástica de um pavimento

O presente trabalho é uma análise experimental que procura investigar os efeitos dos fatores carga por eixo, pressão de inflação e tipo de pneu sobre o desempenho de pavimentos. Os dados e informações existentes sobre o quadro de cargas por eixo praticada pela frota de veículos pesados é razoável. A ação conjunta dos referidos fatores é ainda uma questão pouco explorada. Assim, para compensar a escassez de dados sobre pressão de inflação e tipo de construção de pneus utilizados na frota de carga, programou-se uma pesquisa de campo na rodovia estadual RS/240. As informações oriundas da pesquisa demonstram que há um acréscimo generalizado no valor da pressão dos pneus e um aumento de uso dos pneus de fabricação radial em relação aos pneus convencionais. Os dados de campo subsidiaram a programação de um experimento fatorial cruzado executado na Área de Pesquisas e Testes de Pavimentos da UFRGS/DAER. A variação dos níveis dos fatores deu-se através de um simulador linear de tráfego atuando sobre uma pista experimental com 20 m de comprimento por 3,5 m de largura. Tendo como resposta estrutural do pavimento a máxima deflexão superficial recuperável medida com uma viga Benkelmam, determinou-se como significantes os efeitos dos fatores carga por eixo e pressão de enchimento dos pneus. Os cálculos estatísticos indicam também que não há diferenças significativas entre os pneus tipo 9.00R20 e 9.00x20 e que todas interações não exercem efeitos significativos sobre a variável de resposta. Em seqüência, determinaram-se as áreas de contato do rodado duplo do simulador de tráfego com a superfície do pavimento ensaiado para as combinações dos níveis dos fatores. Pode-se, então, comparar área de contato medida com área circular calculada, considerada em muitos modelos de dimensionamento de pavimentos. Relacionou-se a variação da pressão de contato com a deflexão recuperável e procedeu-se uma comparação da mesma com a pressão de inflação nominal dos pneus. Apresenta-se um modelo de análise do desempenho do pavimento em função da carga por eixo e da pressão de inflação, nos limites do experimento. Os dados decorrentes do experimento viabilizaram a determinação dos Fatores de Equivalência de Cargas para os níveis dos fatores, considerando-se o pavimento ensaiado. Avaliou-se, via evolução das deflexões e dos Fatores de Equivalência de Cargas, a redução da vida do pavimento, obtendo-se, para a combinação de níveis mais críticos de carregamento, resultados significativos de até 88 % de redução. Propõe-se, por último, uma formulação para o Fator de Equivalência de Cargas que considere também a ação da pressão de inflação.

Indicadores de core inflation para a economia brasileira

O presente trabalho apresenta uma medida de Core Inflation para a economia brasileira obtida através dos dados desagregados do IPC-DI/FGV. A revisão do conceito, a justificativa para seu uso na política monetária e as diversas formas metodológicas para seu cálculo são apresentadas na primeira parte do trabalho. O método utilizado para o cálculo do Core foi o de Médias Aparadas (Trimmed Means) com o tratamento para setores selecionados com custos de ajustamento. O indicador escolhido, após submetido a diversos testes, foi o de 20% de aparamento com distribuição de variações pontuais de preços dos setores selecionados por 12 meses.

Voter turnout, inflation, and the politics of macroeconomic policy: an empirical essay

This thesis tests some hypotheses regarding the impact of voter turnout on inflation on the assumption that macroeconomic policies depend on voters’ and politicians’ preferences. The work’s empirical basis includes data from 111 nations from the developing world, covering the period from 1978 to 2000. Its main finding indicates that increases in voter turnout co-vary with higher inflation rates, all else held constant.

Inflation and income inequality: a shopping-time aproach: (Forthcoming, Journal of Development Economics)

Our work is based on a simpliÖed heterogenous-agent shoppingtime economy in which economic agents present distinct productivities in the production of the consumption good, and di§erentiated access to transacting assets. The purpose of the model is to investigate whether, by focusing the analysis solely on endogenously determined shopping times, one can generate a positive correlation between ináation and income inequality. Our main result is to show that, provided the productivity of the interest-bearing asset in the transacting technology is high enough, it is true true that a positive link between ináation and income inequality is generated. Our next step is to show, through analysis of the steady-state equations, that our approach can be interpreted as a mirror image of the usual ináation-tax argument for income concentration. An example is o§ered to illustrate the mechanism.

An ordering of measures of the welfare cost of inflation in economies with interest-bearing deposits

This paper builds on Lucas (2000) and on Cysne (2003) to derive and order six alternative measures of the welfare costs of inflation (five of which already existing in the literature) for any vector of opportunity costs. The ordering of the functions is carried out for economies with or without interestbearing deposits. We provide examples and closed-form solutions for the log-log money demand both in the unidimensional and in the multidimensional setting (when interest-bearing monies are present). An estimate of the maximum relative error a researcher can incur when using any particular measure is also provided.

Sustained growth, government expenditure and inflation

We construct and simulate a theoretical model in order to explain particular historical experiences in which inflation acceleration apparently helped to spur a period of economic growth. Government financed expenditures affect positively the produtivity growth in this model so that the distortionary effect of inflation tax is compensated by the productive effect of public expenditures. We show that for some interval of money creation rates there is an equilibrium where money is valued and where steady state physica1 capital grows with inflation. It is a1so shown that zero inflation and growth maximization are never the optimal policies.

Inflation targeting, credibility and confidence crises

We study the interplay between the central bank transparency, its credibility, and the ination target level. Based on a model developed in the spirit of the global games literature, we argue that whenever a weak central bank adopts a high degree of transparency and a low target level, a bad and self conrmed type of equilibrium may arise. In this case, an over-the-target ination becomes more likely. The central bank is considered weak when favorable state of nature is required for the target to be achieved. On the other hand, if a weak central bank opts for less ambitious goals, namely lower degree of transparency and higher target level, it may avoid condence crises and ensure a unique equilibrium for the expected ination. Moreover, even after ruling out the possibility of condence crises, less ambitious goals may be desirable in order to attain higher credibility and hence a better coordination of expectations. Conversely, a low target level and a high central bank transparency are desirable whenever the economy has strong fundamentals and the target can be fullled in many states of nature.

Is there a price puzzle in Brazil? An application of Bias-Corrected Bootstrap

Using data from the United States, Japan, Germany , United Kingdom and France, Sims (1992) found that positive innovations to shortterm interest rates led to sharp, persistent increases in the price level. The result was conÖrmed by other authors and, as a consequence of its non-expectable nature, was given the name "price puzzle" by Eichenbaum (1992). In this paper I investigate the existence of a price puzzle in Brazil using the same type of estimation and benchmark identiÖcation scheme employed by Christiano et al. (2000). In a methodological improvement over these studies, I qualify the results with the construction of bias-corrected bootstrap conÖdence intervals. Even though the data does show the existence of a statistically signiÖcant price puzzle in Brazil, it lasts for only one quarter and is quantitatively immaterial